Merger between TMI and Motient receives approval in both Canada and the U.S.

Ottawa-based TMI Communications and Motient Corp. of Reston VA are now one step closer to offering continent-wide satellite services under a single banner as regulatory authorities in both Canada and the United States have approved their merger (RoW, Jan. 22/01). The new combined company, currently dubbed Mobile Satellite Ventures Canada, is now missing only approval to use portions of its satellite spectrum to implement a terrestrial in-fill network to provide ubiquitous North American coverage. "At the end of the day it provides for a much stronger entity going forward," Liz Tasker, TMI’s VP business development and service delivery, tells Report on Wireless. "You look at the marketplace and it’s becoming a much more global world in terms of products and services, and this allows us to be a much stronger North American entity." The new company will be run by a combination of personnel from Motient and TMI. Gary Parsons will assume the role of chair of the combined firm and Larry Boisvert, currently president of TMI, will take on the responsibilities of vice-chair. The other 10 members of the board of directors will be made up of the company’s other shareholders, including four other venture capitalist groups, and others. Going forward, Tasker is confident that the company has enough funding to sustain operations, combined with ongoing revenue streams, to keep it going for sometime. When the merger was originally announced last January, the companies received a US$50-million financing round, which was supplemented by another infusion of cash in October (RoW, Jan. 22/01 and Oct. 15/01). "(The merger) allows us to consolidate our operations, which makes it much more cost-efficient and streamlined," Tasker says. All the operations previously headquartered in Reston VA will be moved to Ottawa, while corporate headquarters will remain south of the border. Proposed plan to see some opposition: Tasker The company’s plan to use portions of its satellite spectrum in a terrestrial in-fill network configuration has received vocal opposition from the major cellular operators in the United States. Opposition has even been expressed by some of its mobile satellite service provider competitors. Since Motient’s spectrum was provided essentially for free, competitors resent the competition in the terrestrial environment. Here in Canada, Tasker expects to see some of the same arguments presented from similar parties, but not to the degree that they’ve appeared in the U.S. "I think you’ll see the same tone in Canada, as we’ve seen in the United States," she says. "But (the arguments) will probably be less political and less vocal." The Federal Communications Commission is in a difficult position because it is trying to satisfy all the players involved. "It wants to satisfy the cellular companies on the 3G side and it also wants to ensure the viability of MSS going forward," Tasker says. But the FCC has recognized the financial difficulty that current MSS players are experiencing and hopes flexibility in spectrum usage will help these companies and the industry, she adds. "There is a very big role for MSS to make in the marketplace in providing services into rural communities (in) which cellular companies have difficulty in making a financial go of it," Tasker says. "So I don’t think that either the FCC or Industry Canada will want that to disappear."

Merger between TMI and Motient receives approval in both Canada and the U.S.

News | 12/11/2001 5:00 am EST

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